Both the STOXX 50 and the STOXX 600 traded around the flatline on Monday, as investors adopted a cautious stance amid a lack of fresh catalysts. The only notable data release was the UK's final GDP growth figures, which confirmed the preliminary estimate. Trading conditions are expected to remain subdued this week, as the schedule is shortened by the Christmas holiday, with most major European stock exchanges closed on Thursday and Friday. Meanwhile, investors continue to monitor developments in the war in Ukraine, after a Kremlin aide said that European and Ukrainian revisions to US peace...
The Federal Reserve is shifting from the driving seat back to the back seat, moving to data dependence just as it faces a data blackout due to the government shutdown. Despite these challenges, Morgan Stanley believes rate cuts in December and January remain on the table as the softer labor market will continue to drive monetary policy. The shutdown has suspended several official data releases, including critical jobs reports, leaving the Fed to rely more on market signals and private sector data. "The Fed is effectively flying blind for now," Morgan Stanley economists said in a recent...
At the post-meeting press conference, Fed Chair Jerome Powell explained why policymakers had decided to lower the Federal Funds Target Range (FFTR) to 3.75%–4.00% after the October meeting and took questions from reporters about the move. Chief Powell's press conference takeawaysData available suggests the outlook for employment and inflation has not changed much since the September meeting. Prior to shutdown, data showed the economy may be on a firmer trajectory. Shutdown will weigh on economic activity while it persists and should reverse when it ends. Labour demand has clearly...
The Federal Reserve lowered the federal funds rate by 25 bps to a target range of 3.75%–4.00% at its October 2025 meeting, in line with market expectations. The move followed a similar cut in September, bringing borrowing costs to their lowest level since 2022. Policymakers cited increasing downside risks to employment in recent months while inflation has moved up since earlier in the year and remains somewhat elevated. Governor Miran preferred to lower the target range for the federal funds rate by 50bps and Governor Schmid dissented in favor of holding rates steady. In addition, the...
The United States (US) Federal Reserve (Fed) will announce its interest rate decision and publish the Monetary Policy Statement following the October policy meeting on Wednesday. Market participants widely anticipate the US central bank to cut the policy rate by 25 basis points (bps), lowering it to the range of 3.75%-4%. The CME FedWatch Tool shows that investors are fully pricing in the 25 bps reduction in October and see about a 95% probability of one more 25 bps cut at the last policy meeting of the year in December. The revised Summary of Economic Projections (SEP), published in...
The Fed is expected to cut the federal funds rate by 25bps at its October 2025 meeting, bringing its target range to 3.75%–4.00%. A similar cut is expected in September, which would lower borrowing costs to their lowest level since 2022. Markets will be closely watching the December guidance, although policymakers are not expected to provide significant new insights. The policy backdrop has become increasingly uncertain amid the government shutdown, which has delayed the release of key economic indicators. Among the limited data available, the CPI report showed headline inflation edged up...